Do you know the value of your business?

There is worrying trend that I am seeing in a lot of business owners who are looking to sell at the moment- THEY HAVE NO IDEA WHAT THEIR BUSINESS IS WORTH”

After talking a seller through an estimated selling price and showing them comparable businesses that have sold and are currently on the market- I usually get one of two reactions. There are some people are pleasantly surprised at the value of their business and put their to market.

However often there are potential sellers who are disappointed with the price they are given and this results in them putting off a sale and staying in their business for a few years longer to get it to the stage where they can sell. Unfortunately their enthusiasm and drive in the business usually has dried up and these last few years are a real slog.

Unfortunately there is not a one-size fits all approach when it comes to valuing a business. There are many different theories on how to value a business and many of them are not correct or may not be applicable to your industry. If you’re after an indication on what price it may be worth, take the time to go and see a business broker and have them run through similar sales and the likely sale price for your business. Make sure that you understand the method used to price your business and keep tabs on what businesses are on the market in your industry.

Even if your 2-3 years away from selling, I encourage you to have an assessment done so you know roughly what your business might achieve. There are 2 reasons why I recommend this-

1) So you can plan your future with some confidence know what you will walk away with when you do exit.

2) So if your business isn’t worth what your want, you can take some action and put a plan into place to get it there while your still motivated and enjoying your business.

Take the time to get it right now- it could mean many thousands of dollars in your pocket when you do exit.

If you are interested in knowing what your business may be worth, please feel free to send me an email or call. If you are a few years away from selling, I will also show you some way you can maximize your sale price.